17 October 2006
Uncle Sam wants Linden Dollars
Users of online worlds such as Second Life and World of Warcraft transact millions of dollars worth of virtual goods and services every day, and these virtual economies are beginning to draw the attention of real-world authorities.
"Right now we're at the preliminary stages of looking at the issue and what kind of public policy questions virtual economies raise taxes, barter exchanges, property and wealth," said Dan Miller, senior economist for the Joint Economic Committee of the U.S. Congress.
"You could argue that to a certain degree the law has fallen (behind) because you can have a virtual asset and virtual capital gains, but there's no mechanism by which you're taxed on this stuff," he told Reuters in a telephone interview.
You can almost hear the sorrow in his voice. "There's gotta be some way we can pry some revenue out of these people."
Historically, what the taxman wants, the taxman eventually gets, and Brian J. Noggle warns:
[Y]ou better start saving up, because the IRS is going to find out you bought Illinois Avenue in 1982 without paying sales tax and is going to want interest and penalties.
And arguing that you landed on Luxury Tax two rolls later won't save you, either.Posted at 11:22 AM to Common Cents